The Centre has approved a Rs 1.64 lakh crore plan to revive BSNL
The government offered a Rs 70,000-crore package in 2019, mostly to support a retirement scheme for BSNL workers.
The Union Cabinet approved a Rs 1.64-lakh crore package on Wednesday for the reemergence of state-owned telecom service provider Bharat Sanchar Nigam Ltd (BSNL), with a focus on fresh capital for upgrading the company’s network as well as allocating spectrum for it to offer 4G services, de-stressing its balance sheet, and expanding its fibre network.
The four-year rehabilitation strategy comes after the government offered a Rs 70,000-crore package in 2019, mostly to support a voluntary retirement scheme for BSNL employees.
Thankful to PM @narendramodi Ji, as the cabinet approved Rs 1.64 Lakh Crore support to BSNL towards our firm resolve of Antyodaya.#CabinetDecisions pic.twitter.com/9YssNzJU9C
— Ashwini Vaishnaw (@AshwiniVaishnaw) July 27, 2022
The whole rehabilitation package announced Wednesday will include Rs 43,964 crore in cash, with the remaining Rs 1.2 lakh crore in non-cash components distributed over four years. The Centre will make administrative allocations of spectrum required by BSNL to provide 4G services. The allocation of spectrum in the 900/1,800 MHz band would be done through equity infusion at a cost of Rs 44,993 crore.
“The 2019 recovery plan saved BSNL.” It had previously been experiencing unsustainable operational losses. The program increased the operating profitability of BSNL. Communications Minister Ashwini Vaishnaw told reporters, “We want BSNL to become net profit within three to four years with the existing relief package.
To meet the projected capital spending (capex) for the next 4 years, the Centre will finance capex of Rs 22,471 crore for developing 4G technology stack, while BSNL will receive Rs 13,789 crore as viability gap funding for industrially unviable rural wireline operations carried out between FY15 and FY20, he added.
Statutory dues of Rs 33,404 crore would be converted into equity to de-stress the balance sheet. The Centre will also give a sovereign guarantee in order to raise funds to repay existing loans.